🔒As pandemic recedes, CT markets itself as a potential remote work hub

Before the pandemic hit, Joe Hochberg worked out of the offices of a small Chicago trading company, where he’s employed as an options trader, but when COVID-19 forced many people to abandon their cubicles it also introduced unprecedented flexibility.

Hochberg, a New Jersey native, has been working remotely from his home state for the past year, but he’s moving to Hartford, where his girlfriend lives as she finishes medical school at UConn. When he arrives, he’ll work out of his apartment and downtown Hartford coworking space ThinkSynergy. He said he’s enjoyed working remotely, and could see doing it permanently if his employer is amenable to it.

Hochberg said he’ll likely move away from Hartford after his girlfriend graduates, but he’s open to staying here and working remotely long term if she takes a job in Connecticut.

“I think a lot depends on how the next year goes,” Hochberg said.

ThinkSynergy President Keith Werner said several new tenants renting office or living space at his Asylum Street property are working remotely for out-of-state companies. He’s actively promoting the space to small and medium-sized businesses based in major East Coast cities like New York and Boston, which could be interested in opening satellite locations in smaller and less expensive locales.

“There are clear signs that small to large companies are going to have a more open door policy to working virtually,” Werner said. “That’s opened up a bigger opportunity for coworking [spaces] coming out of COVID.”

Werner’s not the only one who sees an opportunity.

Several of Connecticut’s public and private economic development organizations — including the Department of Economic and Community Development (DECD), AdvanceCT and MetroHartford Alliance — have strategies and marketing plans in place to promote Connecticut as a satellite location for companies located in larger nearby cities.

In fact, they are actively talking with Boston and New York City firms about establishing remote work hubs in Connecticut, where employees who favor living in a lower-cost or less-densely populated area could primarily work.

“We’re very much focused on companies that may be rethinking their presence in these large metro areas that are expensive,” said Peter Denious, president and CEO of AdvanceCT, the state’s nonprofit economic development arm. “I think you are going to hear some announcements in the not-too-distant future about some of these companies establishing a presence in Connecticut.”

Their efforts are buoyed by some state lawmakers who have proposed a bill that would task DECD, the state’s economic development agency, with incentivizing the creation of remote work hubs in the state. The bill has already passed through the Senate and is awaiting action in the House.

Future of work

There’s been plenty of talk over the past year about Connecticut being a landing spot for people fleeing larger Northeast cities, as remote work took firm root for many companies during the pandemic.

Using change-of-address data from the U.S. Postal Service, commercial real estate services firm CBRE calculated that 27,200 people moved to Connecticut from the New York City-Newark-Jersey City area in 2020, making it the fifth-most popular destination for city transplants behind New York state, New Jersey, Florida, Pennsylvania and California.

A big question that remains, however, is what the future of work looks like. Many predict remote work will increase long term, but to what extent is unclear, especially as the pandemic wanes and more people get vaccinated. How that trend plays out could have major implications on where people live and where companies establish all or parts of their operations.

Donald Poland, managing director and senior vice president of urban planning at East Hartford real estate advisory firm Goman+York, said he thinks employees will return to corporate offices, but not to the extent they did pre-pandemic.

“I think that at least in corporate America and the business world we’re going to see a meaningful shift,” Poland said. “There are going to be more employees that are now remote than there previously were.

Since the onset of the pandemic, Connecticut economic development leaders have been thinking about how the state could leverage increased interest in the suburbs and/or smaller cities to try to attract more companies and people to the state.

Denious said most companies he talks to are in the process of figuring out their remote work policy and leaning toward a hybrid setup, where employees work out of their office and homes.

In these conversations, Denious said he’s been highlighting the value proposition of renting office space in Connecticut as opposed to larger Northeast metro areas.

“Maybe you’re going to maintain some of your presence in some of these [larger] metro urban areas, but you can think about opening a hub here,” Denious said.

The selling points for Connecticut include its proximity to Boston and New York, availability of urban and suburban living for residents and the state’s diverse demographics and highly-educated workforce.

Affordability is also a key factor. While Connecticut is an expensive place to live and work compared to many southern and Midwest states, it’s more affordable (other than parts of Fairfield County) than Greater Boston and New York City.

For example, a recent analysis by the MetroHartford Alliance and accounting and consulting firm CohnReznick found renting 20,000 square feet of Class A office space in Hartford costs an average of about $557,000 per year, compared to $1.4 million in Manhattan and $1.1 million in Boston.

Denious said he’s specifically targeting companies in five industries already flourishing in Connecticut: insurance, financial services, technology, advanced manufacturing and life sciences.

MetroHartford Alliance CEO David Griggs said his organization has talked to at least 100 companies about establishing remote work hubs in Greater Hartford, and 14 of them are in the final stages of deciding whether to set up shop here or in other cities. Like Denious, he’s been emphasizing the cost differential between the Hartford metro area and its higher-cost neighbors.

“We’re certainly seeing more activity, we’re having more conversations about real opportunities than we were, certainly, six months ago,” Griggs said.

Marketing campaign

Connecticut’s strength as a remote work option has a lot to do with its geography, said DECD Commissioner David Lehman. New York companies that employ people who live in Litchfield and Fairfield counties, for example, could establish a Connecticut office where those employees work most of the time, but still be close enough to come into the New York office when necessary, he said.

In fact, Gov. Ned Lamont’s two-year state budget includes spending part of $20 million in federal stimulus funds on marketing Connecticut to companies as a locus for remote work hubs, Lehman said. However, that effort won’t include offering incentives like paying people to move to Connecticut as states like Maine and Vermont have done.

Lehman said he’s not sure such perks would be effective.

Martin Guay, vice president of business development for New Britain manufacturing giant Stanley Black & Decker, said he has long touted the potential for Connecticut’s cities to establish remote work hubs. Stanley opened its Manufactory 4.0 advanced manufacturing center in Hartford’s Constitution Plaza in 2019, and Guay wants to establish another manufacturing hub in the city’s Parkville neighborhood.

In addition to bringing more workers to Connecticut, Guay said remote hubs — especially for manufacturers — could expand employment opportunities for state residents looking for work.

Coworking boom?

As state lawmakers near the end of the 2021 legislative session, they’re considering a bill that would, in part, encourage and incentivize the creation of remote workspaces.

State Rep. Caroline Simmons (D-Stamford) co-chairs the Commerce Committee, where the bill was initially proposed. She said Connecticut cities like Stamford could be especially attractive to remote workers, as it offers city living with proximity to New York and the shoreline. She and state Sen. Tony Hwang (R-Fairfield) both said they’re optimistic the bill will pass.

Meantime, Hartford area coworking spaces are also trying to seize the moment.

ThinkSynergy’s Werner is focusing on recruiting companies thinking of reducing their footprints in higher-cost cities. These companies could locate workers in its coworking office space, which offers services ranging from secretary assistance and bookkeeping to supply chain management. Companies and workers can also rent residential units in the same building.

Indeed apartment landlords are increasingly including coworking spaces in their residential properties to cater to an increasing number of residents likely working from home in the future, at least part of the time.

“That was always a trend where people want to work from home and I think post-pandemic it will become even more common,” said developer Randy Salvatore, who is currently building a $50 million, 270-unit apartment project in the shadows of Dunkin’ Donuts Park in downtown Hartford.

When that development debuts early next year it will include coworking space, he said.

“I think people will go back to the office but I think maybe they will be working from home one or two days a week and so during those days when they are home they don’t want to sit in their apartment,” said Salvatore, CEO of Stamford-based RMS Cos. “They want to be in an open area that is set up in a friendly way so they can be around other people but also have their own workspace and be able to get a cup of coffee or a snack.”

Anissa Teich, managing director at West Hartford CoWorking, said she’s seeing opportunity among prospective tenants who work for a company in a major metro area, but would like to live in a suburban community.

Teich said she’s seeing a wave of interest among people who have been working from home as a temporary measure, but now see remote work as likely permanent.

“Our biggest competitor is the home office,” Teich said. “We’re now starting to see a number of those people exploring what can be done outside of their house. The community element [of a shared workspace] is much more important to them.”